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Beginning Farmers and the Farm Bill

Beginning Farmers and the Farm Bill. Gary Matteson Young, Beginning, Small Farmer Programs The Farm Credit Council, Washington, DC. Beginning Farmers in the Farm Bill. Training Beginning Farmer and Rancher Development Program Veterans Military Veteran Agricultural Liaison

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Beginning Farmers and the Farm Bill

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  1. Beginning Farmers and the Farm Bill Gary Matteson Young, Beginning, Small Farmer Programs The Farm Credit Council, Washington, DC

  2. Beginning Farmers in the Farm Bill • Training • Beginning Farmer and Rancher Development Program • Veterans • Military Veteran Agricultural Liaison • Conservation • EQIP (Advance Payment) • Conservation Stewardship Program (Set Aside) • Conservation Loan Program (90% guarantee) • Lending • Direct Farm Loans (Priority) • Guaranteed Farm Loans (Priority) • Microloans (Priority/no term limits) • Experience Requirement (flexibility) • Crop Insurance Premium Reduction (10%)

  3. NSAC website http://sustainableagriculture.net/blog/2014-drilldown-bfr-sda/

  4. Why is this happening?

  5. Realignmentto “Retail Agriculture” Formerly: “alternative agriculture” Now: • Pervasive and Popular • Economically significant • Unconfined as to product or region

  6. Pervasive…If marketing channels were commodities… Rank of farming activity, including market types, by farming as primary or other occupation Direct to consumer sales

  7. Economically significant… organic, direct, local $8 billion cotton, rice $7 billion National Ag Statistics Service, 2007

  8. Unconfined as to product or region…

  9. …on to the next Farm Bill • Concept of Retail Ag as a sector • Anecdotally, beginning farmers return to the farm and find new marketing channels for same commodity products • Recognize the political landscape or look for lost keys under the streetlight?

  10. Outsider’s perception of a lending operation Goal: Show me how to get the money

  11. Insider’s perception of lending operation Loans to farmers Goal: Single version of the truth

  12. The borrower-lender relationship Similar goals: long term viability High expectations for both Valuable partner

  13. Gary Matteson Farm Credit Council matteson@fccouncil.com 202-879-0840

  14. Retail Agriculture is characterized by: • Consumer oriented marketing rather than processor/integrator oriented • Diversified in agricultural production instead of specialized • Highly diversified marketing arrangements • Different business models, but profitable • Work around a less well developed distribution system (and infrastructure)

  15. Retail Agriculture is characterized by: • Gaining efficiency by intensive layering of multiple related businesses into farms • Addition of new farms in direct-to-consumer markets to meet demand • Use of new production techniques and information technology to boost profitability • Promoting community among non-farmers

  16. Implications for YBS farmers • Emphasis on entrepreneurial skills that are portable from farm to off-farm jobs • Greater occupational mobility • Multiple job-holding and multiple enterprises will be seen as stable income • Core relationship of farm business to the community will change (farmers seen as rooted entrepreneurs/employers)

  17. Expected financial performance of Retail Agriculture business models* *Illustration of synthetic archetypes based on case studies

  18. Constructive Creditis an: Appropriately structured loan… To achieve realizable goals… That are within the capacity of the borrower to manage and achieve… In order to accomplish repayment.

  19. Constructive Credit is NOT: A loan for more than you need… For a farm enterprise purpose neither you nor the lender understand… Without adequate assessment of risk… Without likelihood of repayment.

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